The Victorian Vacant Residential Land Tax (Vrlt Tax) is a state tax that applies to owners of residential property in Victoria, Australia, focusing on properties that are considered vacant. This page covers what the Vrlt Tax is, who it applies to, recent updates for 2025, how it is calculated, and step-by-step filing and compliance guidance for affected property owners.
Scope & Who This Applies To
Vrlt Tax applies to residential land located in Victoria, Australia, that is deemed vacant for more than six months in a calendar year. The tax specifically targets owners of properties that are neither occupied nor genuinely used, with notable exceptions.
The rules apply to individuals and entities holding title to residential property, as well as trusts and companies. Residential land includes holiday homes, investment properties, and other dwellings, with some exemptions (e.g., primary residences or circumstances such as renovations or deceased estates).
Exclusions typically cover land in alpine resorts and some special use classes. The tax year and all relevant thresholds are reviewed annually by the Victorian State Revenue Office (SRO), and values may change from year to year.
Key Facts (At-a-Glance)
Item
Details
Tax Year
2025 (noting changes effective from 1 January 2025; values may differ in earlier/later years)
Filing Status / Entity Type
Individuals, companies, trustees owning residential land in Victoria (excluding alpine resorts and certain exempt categories)
Rate Structure
Progressive; rates starting from 1% of the property’s capital improved value for qualifying vacant properties (“sample/illustrative”—check official SRO guidance each year)
Income Scope
Based on the use status of the residential property, not the owner’s income
Deductions & Credits
Exemptions available for newly constructed property, principal place of residence, certain absences (e.g., medical, deceased estate), temporary occupancy
Deadlines
Assessments typically issued following the calendar year; payments and declarations due as determined by Victorian SRO each cycle. Extensions may be possible in limited cases.
Forms
Vacant Residential Land Tax declaration forms; official SRO documents and portal for lodgment. Refer to the Victorian SRO VRLT page for up-to-date forms.
Penalties
Late declarations or payments may attract administrative penalties and interest—specific rates “sample/illustrative;” confirm rates and processes on the SRO portal.
How the Tax Is Calculated
The Vrlt Tax is assessed by applying the relevant rate (e.g., 1%) to the capital improved value (CIV) of the property as determined by the state valuation for land tax purposes.
To determine liability, property owners must review the occupancy status for the previous calendar year and self-assess against exemption categories.
If a property is vacant for more than six months (aggregate, not necessarily consecutive), it becomes subject to Vrlt Tax unless an exemption applies.
No deduction or tax credits are typically available against Vrlt Tax, as it is an asset-based property tax rather than an income tax.
Owners may be required to submit an annual declaration to the Victorian SRO to confirm occupancy status or claim exemptions each year.
Withholding or prepayment does not generally apply; tax is settled when the assessment is issued.
Rates, Thresholds & Examples
Bracket/Threshold
Rate
Filing Status
Notes
Capital Improved Value up to AUD 1 million
1% (sample/illustrative)
Any owner, non-exempt
Rate and thresholds are subject to annual update
Multiple vacant properties
Incremental or additional surcharge may apply (sample/illustrative)
Entity or individual with >1 vacant property
Check for progressive rates and latest SRO guidance
Example: If a Melbourne apartment is valued at AUD 900,000 CIV and left vacant for over six months, the Vrlt Tax for the 2025 calendar year would be sample/illustrative AUD 9,000, unless exemptions apply.
Always confirm current rates, thresholds, and exemptions each year on the Victorian SRO site or the official VRLT portal.
Deductions & Credits
Unlike income tax, direct deductions or credits do not apply to the Vrlt Tax itself. Instead, eligibility for full or partial tax exemption depends on the status of the property and its usage over the calendar year.
Major exemptions include: principal place of residence, recently constructed or newly purchased property (usually exempt for up to 12 months), deceased estates (usually exempt for up to 3 years), and temporary absences (e.g., for work, medical reasons, or while major renovations are underway).
Owners must proactively claim exemptions by declaration; supporting evidence may be required. Refer to SRO guidance for detailed eligibility and evidence requirements.
Documentation & Filing Steps
Gather property valuation details, occupancy records, and relevant documents (e.g., rental agreements, renovation permits, proof of residence).
Assess whether an exemption applies based on the year’s occupancy status and official definitions.
Access and complete the required VRLT declaration via the SRO Victoria VRLT portal, or lodge by mail if instructed.
Submit supporting evidence as required for exemption claims (death certificate, work assignment notice, building permits, etc.).
Pay the assessed tax by the deadline communicated by the SRO. Monitor for confirmation of payment and compliance status.
Common Pitfalls & Compliance Notes
Missing the declaration deadline or failing to pay on time may result in penalties, including substantial fines and interest charges.
Common errors include not understanding which exemptions apply, providing incomplete documentation, or misunderstanding “vacant” status (e.g., unoccupied holiday homes).
Keep detailed records for at least several years to support exemption claims if the SRO requests further information.
Direct all disputes, requests for review, or compliance notices to the SRO via official contact channels.
Comparisons & Special Cases
Similar Taxes or Regimes
Vrlt Tax is distinct from broader land tax in Victoria, as it specifically targets unused residential property rather than all investment land.
Council rates, federal capital gains tax, and stamp duty operate separately, based on property value, disposal, or transfer events, not ongoing vacancy status.
Other Australian states may implement comparable but separate “vacancy” or “empty home” taxes, each with their own thresholds and exemptions.
Frequently Asked Questions
Who must pay the Vrlt Tax?
All owners of residential land in Victoria (except alpine resorts) whose property is vacant more than six months in a calendar year.
Exemptions for primary residence, new builds, and other limited cases; each owner should assess their position on the SRO’s VRLT page.
How is “vacancy” determined?
By calendar year: if the property was not occupied for more than six aggregate months, it is deemed vacant.
Supporting documentation may be needed if claiming an exemption.
What penalties apply for non-compliance?
Late payment or inaccurate declaration may result in administrative fines and interest.
Official SRO guidance outlines current penalty rates and appeal procedures.
Conclusion & Next Steps
The Vrlt Tax affects property owners in Victoria with potentially vacant residential real estate, with a critical focus on correct status assessment and timely compliance.
Confirm your property’s classification, assess for exemptions, and consult the official SRO VRLT page for detailed forms, rate updates, and authoritative rules each year.
